Gold Price Forecast – Gold Pulls Back from $4,500 Barrier as Yields Rise

Gold

The gold market initially rallied during trading on Tuesday, but has pulled back from the crucial $4,500 level. The $4,500 level is an area that is a large, round, psychologically significant figure and has been important a couple of times. In fact, in June when we got that huge dump in gold, that’s where it started from.

The pullback is probably not a huge surprise considering that interest rates in America are rising during the session again, which can hurt non-yielding assets such as gold and silver. Ultimately, the 50-day EMA is reaching towards the 200-day EMA, trying to cross over and kick off the so-called golden cross. That might be something worth watching.

Geopolitical Deadlock and Rate Headwinds

But this is a market that, unfortunately, is held hostage by the same thing most markets are: the Middle East. The nonsense in the Middle East continues with leaders of both the United States and Iran trading social media barbs but not really making any progress.

So, in this environment, everything’s just kind of locked up, and I think you’re seeing that in gold. With lack of clarity comes a lack of momentum in most markets, and this is no different.

The longer-term outlook for gold is possibly good, but central banks are tight at the moment in a couple of major countries, and that is causing a little bit of an issue as well. If rates start dropping, then non-yielding assets become a little bit more interesting, and I think at this point, there’s a huge disconnect between what should be and what is. And I also believe that there are so many questions right now; a lot of traders might just be stuck.